Aave founder Stani Kulechov: DAOs are not coming to an end, but decentralized governance must be upgraded

March 11 News, the founder of decentralized lending protocol Aave, Stani Kulechov, recently stated that decentralized autonomous organizations (DAOs) are not destined to fail, but their current governance models require structural adjustments to improve decision-making efficiency and prevent governance politicization. He pointed out that the key to the future development of DAOs lies in maintaining decentralized transparency mechanisms while reducing inefficient collective voting processes.

Stani Kulechov posted on social platform X that many DAOs currently face serious governance challenges in practice. Since proposals often need to go through forum discussions, community feedback, and multiple rounds of on-chain voting, a decision can take weeks or even longer to pass, making it extremely difficult for DAOs to operate efficiently at the execution level.

DAOs were originally designed as organizational structures without centralized management, where all decisions are made through community consensus. However, data shows that most DAOs have voting participation rates typically between 15% and 25%, which not only reduces governance efficiency but may also lead to a small number of large holders or active members wielding excessive influence.

Kulechov also pointed out that DAO governance is prone to political tendencies in practice. Some participants form factions around proposals, and the voting process gradually evolves into a tool for vying for influence, even forming long-term political alliances to push their own proposals through in the future. This phenomenon somewhat undermines the original emphasis on decentralized governance in DAOs.

To address this issue, Kulechov proposed directions for upgrading DAO governance. He believes that on-chain rules, transparency of treasury funds, and voting mechanisms for major decisions should still be preserved, as these are core to blockchain governance transparency. However, for daily operational matters, token holders should not vote on every detail; instead, a professional team with relevant expertise should be responsible for execution.

He stated that future DAOs need to establish a new governance structure: a core team responsible for daily decisions, with all actions recorded on-chain, and the community able to supervise team performance through voting. If the team fails to meet set goals, token holders can replace the team via on-chain governance mechanisms. This verifiable accountability system will be a key feature that differentiates DAOs from traditional companies.

It is worth noting that recent governance disputes have arisen within the Aave community. On March 1, a governance proposal titled “Aave Victory Framework” passed initial review, but subsequently, the important governance representative organization Aave Chan Initiative announced it would gradually withdraw from Aave DAO due to concerns over the current proposal process and voting mechanisms.

Additionally, a proposal in January to transfer full control of Aave’s brand assets and intellectual property to the DAO failed to pass, further fueling community discussions about the governance structure of DeFi protocols and the future development of the DAO model. Analysts believe that the governance disputes within Aave highlight the challenges of decentralized governance in practical operation and prompt the industry to reconsider the evolution of DAO governance frameworks.